Monday, April 5, 2010

Colorado's for-profit college experience a cautionary tale for Milwaukee

A recent Denver Post report on the troubling record of for-profit colleges in Colorado is a cautionary tale for Milwaukee as it awaits the opening of Corinthian Colleges Inc.

The Post's examination of graduation rates, loans, default rates and other federal data disclosed that for-profit schools generally underperform their public and nonprofit counterparts and have a record of misleading students about job placement, credit transfer and potential incomes.

The Post reports:

...with that growth (of private for-profit colleges) have come complaints and lawsuits over recruiting practices, tuition costs and the ability of graduates to land jobs in their fields of study.

There also is growing concern in Washington, D.C., about the graduates' ability — or inability — to repay the millions in federal loans for- profit students take out to pay tuition.

In three years, the state has received 164 student complaints about for-profit schools. The state has revoked authorizations of two for-profit schools and one for-profit vocational school since September...

Among the Post's findings:

• For-profit students are defaulting on their loans at much higher rates than students enrolled in public or private nonprofit schools. Twenty-three percent of students who attended Colorado for-profit schools were in default in the first three years they are required to make payments, according to a Denver Post analysis of 2009 federal Department of Education data.

• Tuition rates are high. Associate's degrees usually run $30,000 to $40,000, and bachelor's degrees usually cost between $60,000 and $75,000 at for-profit colleges.

That compares with Metropolitan State College of Denver, where a three-year bachelor's degree runs about $12,900, and the University of Colorado at Boulder, where the cost is $29,000 for in-state students.

• Taxpayers are paying for it. Last year, Colorado students received $1.6 billion in federal loans and Pell grants. Of that, $690 million went to for-profit schools, according to an analysis of federal loan data.

• Twenty-five percent of students seeking bachelor's degrees at for-profits receive their degrees within six years, compared with 55 percent at public colleges


Critics say problems often begin the moment potential students reach out to the for-profit college.

Colleges are allowed to compensate admissions representatives based, in part, on the number of students they sign up. Critics say that makes the process less of a counseling session and more of a sales job.

"Whenever you pay someone such as a recruiter based on numbers they bring in, you're just opening the door for abuse," said Rich Williams, a higher education associate with the Public Interest Research Group in Washington.

Aggressive recruitment strategies is a key allegation made in a complaint against Westwood College, a Denver-based online and career college...The complaint alleges Westwood engaged in "deceptive and illegal trade practices" by failing to disclose the total cost of the education program and misleading potential students about job placement opportunities and the ability to transfer credits to other schools.

The entire Denver Post expose is linked here.

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